Coal India's subsidiary plans to auction two blocks for underground coal gasification

KOLKATA: Central Mine Planning & Design Institute, a subsidiary of Coal India, plans to auction two blocks for underground coal gasification, chairman and managing director AK Debnath said.

The company will invite a global expression of interest this month and engage the company that is ready to share the highest percentage of profit, he said. “The blocks to be offered are in Central Coalfields and Western Coalfields and have substantial reserves. These two blocks can be economically exploited for underground coal gasification,” Debnath said.

Underground coal gasification is an in-situ gasification process carried out in nonmined coal seams by injection of oxidants. The product gas, which is brought to the surface through production wells, could be used as a chemical feedstock or fuel for power generation. The technique is applied to resources that are otherwise unprofitable or technically complicated to extract by traditional mining methods. It also offers an alternative to conventional coal mining for some resources.

Debnath did not quantify the reserves for these blocks, but said the pre-bid meeting has generated a good response with at least 14 parties attending it. He said the company is also ready with data package for shale gas in its command area, which will be handed over to the Director General of Hydrocarbons (DGH) for exploration.

“We have managed to identify the strata where gas exists and have compiled data from borehole drilling. Shale gas reserves in many places across the country were found, the maximum being at the Cauvery basin. ONGC is likely to take up a project on a pilot scale,” Debnath said.

The subsidiary has also compiled data package for coal bed methane. The DGH is expected to shortly go for the fifth round of coal bed methane bidding, he said. The DGH has so far offered 33 blocks, covering 17,000 km in four rounds of bidding.

However, only four blocks have come to production. “Of the eight blocks awarded in the first round, only four are producing 2.5 lakh cubic metre of gas per day, much below the expected rate of production.

This worries the petroleum and natural gas ministry about the success of the fifth round of CBM bidding,” an official said.